Pharmacare in brief: A vision for a healthier Canada

(Katarina Martins / The McGill Policy Association)

(Katarina Martins / The McGill Policy Association)

In 2015, more than one in five (23 per cent) of Canadians reported that in the previous year they or someone in their household did not take medication as prescribed, due to the cost. This includes 14 per cent who did not fill a prescription, 10 per cent who did not renew a prescription, and 15 per cent who took measures to make a prescription last longer, such as skip doses. These statistics may seem shocking, especially given that Canada’s health care system is ranked higher, and frequently lauded as better, than many other developed nations’ systems. However, prescription drug coverage is not included in Canada’s Medicare, and access to affordable medication varies greatly among the provinces and territories. An Advisory Council on the Implementation of National Pharmacare was established in 2018 with a mandate to provide advice on how to implement national pharmacare. Its final report is expected in spring 2019 and a national pharmacare policy might not be far behind.  

What is pharmacare?

Pharmacare is a type of health insurance coverage that includes prescription drugs. Canada currently has Medicare, a single-payer health care system in which patients do not have to pay out-of-pocket for visits to the hospital and doctor’s office. Nonetheless, patients are responsible for the costs of any medication prescribed to them outside the hospital. Coverage for prescription drugs is available through more than 100 public and 100,000 private insurance plans. For example, many employers offer private benefit plans which cover most of their employees’ prescription expenses, while seniors and patients with specific ailments are covered partially by public plans specific to each province or territory. However, the quality of, and access to, coverage differs greatly across Canada.  

(The Angus Reid Institute)

(The Angus Reid Institute)

Why does Canada need a national pharmacare policy?

Even though 95 per cent of Canadians are eligible for some form of prescription drug coverage, not all plans are equal. Some may require deductibles or copayments which place heavy costs on patients, and the types of coverage offered by public plans varies from province to province. Provinces and territories might offer coverage based on factors such as age group, income, or combinations of factors such as a person’s income and their unique drug costs. Due to this inconsistent and sometimes poor coverage, nearly one million Canadians reported spending less on food and heat in order to pay for their medications in 2016.

What are the possible drawbacks of a national pharmacare policy?

While a national pharmacare policy is needed in Canada, one drawback that many people have cited is the possibility that implementing such a policy will raise taxes substantially. In summer 2018, The Institute of Fiscal Studies and Democracy (IFSD), a Canadian think-tank, published a lengthy report on the potential impacts of a national pharmacare policy. IFSD concluded that while a policy is feasible, the cost burden of pharmacare could hurt the provinces as expanding coverage would require them to increase revenues or decrease expenditures.

However, other studies have reached a different conclusion. In 2015, researchers at Harvard, the University of Toronto, and the University of British Columbia published a study in the Canadian Medical Association Journal which stated that implementing a national pharmacare policy would not actually cost Canada more, but less over time. It estimated that Canadians pay around $22 billion a year for prescription drugs and a universal drug plan would cost about $7.3 billion less per year. It examined multiple types of plans, and even with the plan considered the worst-case scenario, the savings would still amount to $4.2 billion per year.

What will happen next?

Canada is currently the only industrialized country with a universal healthcare system that does not include universal coverage for prescription drugs. As of now, the Liberal government is planning to include a limited addition to Canada’s healthcare system in the spring budget in order to include some coverage for medications. While this is a start, with the idea of a pharmacare policy gaining ground in the public, it’s possible that pharmacare will become one of the most important election issues in the fall.


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